June 2017 Condo Association News Roundup

The Summer Solstice has passed, and we’re just about at the halfway mark for 2017. This month has included a number of major news stories that impact Condo life. In June, we saw Airbnb back in the news as they reached a major deal with the Michigan government. The Colorado Supreme Court ruled on developer liability, and a major lawsuit in Florida was resolved. Enjoy the June 2017 Condo Association news!

Colorado has been struggling with the issue of construction defect reform for some time. The building industry claims the threat of litigation is leading to developers who are unwilling to construct new Condo housing in Colorado, which in turn is leading to a housing shortage. Advocates for Owners note that limiting liability could lead to substandard construction that leaves Owners holding the bill.

The Colorado Supreme court has ruled – and it has some Owners very mad.

A recent ruling by the Colorado Supreme Court has major implications on the ability of Owners to sue developers. The specific nuance of the case pertains to certain language within the Condo declaration and Bylaws that limits the ability of Owners to sue developers. The case is being hailed as beneficial for the industry, as it limits liability for construction defect cases. Owner advocacy groups are appalled, however, as they feel the ruling allows developers to protect themselves from litigation in an unfair manner.

The bottom line is buyer beware. No matter where you buy your Condo, particularly a new one or a conversion, make sure you understand the financial state of the property and know exactly what you’re getting into.

Another month, more Airbnb news. Airbnb just hammered out a deal with the state of Michigan to start collecting and paying a 6% hotel tax for people utilizing the service. This is a very big step for the company in the state of Michigan. Now that the company is paying tax revenues, it is entirely possible you’ll see the state start to be more Airbnb friendly. Tax-paying businesses can often have substantial influence and sway in states.

Will short term rentals keep expanding?

If you’re in Michigan, you should make sure you’re familiar with short-term rentals and look at policies for managing them. It looks like Airbnb is likely settled in to stay in your state – will this be the first of many, as predicted? Or is it just an anomaly?

Yet again we see a Florida Condo Association in the news. The Q Club Hotel LLC is a large property which includes six commercial units and 333 personal units which are also rented as hotel rooms under the Hilton brand. Owners within the Association were shocked when their expenses went from $46,000 in fees to $2-3 million. So they lawyered up and sued the Association.

After a lengthy lawsuit, the Association was able to prove the low fees were due to a substantial accounting error. Per the ruling, it turned out that Owners were not in fact paying their fair share. The article notes that Owners were right to question why the costs skyrocketed – but that in the end, the fees were legitimate. While most Associations don’t include a huge luxury hotel, the bottom line stays the same. Pay attention to your Condo governance and read important documents. But maybe figure out if the costs are legitimate before you sue the Association – because in the end, you’re suing yourself.

That’s all for the June 2017 Condo Association News! Did you know that you can get even more news articles by signing up for our mailing list? Mailing list subscribers get monthly bonus news stories and analysis. Join the list today!